Are you in compliance?

Accounting & Auditing Update

The "Accounting & Auditing Update" is written by Tammy Whitehouse, a veteran business writer who has been a regular contributor to Compliance Week since 2005. Her work has also appeared in industry journals and periodicals including Journal of Business Strategy, Strategy & Leadership, Compensation & Benefits Review, Inc, Buyside, and myriad others. Whitehouse welcomes questions and comments from readers; she can be reached via e-mail at twhitehouse@complianceweek.com.

As consolidation partners pair off and plan their survival strategies, accounting rules may soon require them to assign some shelf life to brand names and other intangible assets that may be headed for the shredder.The Emerging Issues Task Force of the Financial Accounting Standards Board has been wrestling with what...

To regulate the auditing profession through market turmoil and a call for new auditing standards, the Public Company Accounting Oversight Board is looking for a 9-percent increase in its operating budget.The PCAOB is sending to the Securities and Exchange Commission a budget that would seek $157.6 million in funding for...

Pension funding requirements promise to cripple companies whose defined benefit plans have been ravaged by market losses, prompting an urgent call on Congress to rethink the technical requirements of the 2-year-old Pension Protection Act.More than 350 corporate supporters have appealed to Congress to ease up on some specific funding requirements...

In its ongoing work to fully codify U.S. Generally Accepted Accounting Principles, the Financial Accounting Standards Board is still seeking comment on its proposals to establish new accounting standards for how to assess whether an entity is a going concern and how to report on events that occur following a...

Despite whatever back-office work may still remain unfinished, the Financial Accounting Standards Board has promised its guidance requiring new disclosures around off-balance-sheet activity will be finalized by Dec. 15 so that it can be effective at the same time it is issued.FASB is putting the finishing touches on FASB Staff...

Audit regulators apparently are having trouble getting all of their required inspections completed, so they’re considering changing the inspection rules again.The Public Company Accounting Oversight Board will hold an open meeting Thursday, Dec. 4, to consider amending Rule 4003, which governs the frequency with which registered audit firms must be...

The Securities and Exchange Commission study of mark-to-market accounting will defend its use and the rulemakers who write accounting standards, but will call for more guidance on fair value and more work on how to determine when writedowns for troubled assets are warranted.SEC Chairman Christopher Cox said in a speech...

Auditors need to get more skeptical and supervisors need to get more engaged when it comes to crucial, high-risk financial reporting areas, according to a recent report from audit regulators.The Public Company Accounting Oversight Board said audit deficiencies persist in many cases because auditors aren’t skeptical enough, especially at the...

Audit regulators have voted in a new rule for themselves to provide more time to finish inspections that are supposed to be completed in 2008, especially for overseas firms, because of the difficulties they’ve encountered in getting inspections completed.They’re also looking for public comment on a second proposed rule change...

The Center for Audit Quality is encouraging audit firms to follow a common format for testing journal entries and other journal adjustments to make it easier for auditors to spot potential fraud.The CAQ developed a practice aid with the help of auditors from its various member firms for testing journal...

The Financial Accounting Standards Board is pulling back from its call for fair-value measurement of outstanding lawsuits when entities are reporting on newly acquired business units.FASB published a proposed staff position that would revise Financial Accounting Statement No. 141R, Business Combinations, with respect to contingencies, or unresolved issues such as...

Companies sponsoring pension plans have won some sympathy from Congress on the difficulty in funding pension plans that have been ravaged by market turmoil.Both houses of Congress have approved the Worker, Retiree, and Employer Recovery Act of 2008 to ease up on the two-year-old requirements of the Pension Protection Act...

A member of the Public Company Accounting Oversight Board is calling on his fellow board members to get serious about converging public company auditing standards with international standards and those for private organizations in the United States.PCAOB member Bill Gradison is in Denver today to address the Colorado Society of...

U.S. and international accounting rule makers want feedback on their initial efforts to bridge the wide gulf in their respective rules on recognizing revenue.The Financial Accounting Standards Board and the International Accounting Standards Board have published a joint discussion paper on their work so far to establish a single revenue...

The Financial Accounting Standards Board has published the second of four planned pieces of guidance intended to help free up seized credit markets.The second proposed staff position would amend Financial Accounting Standard No. 107, Disclosures About Fair Value of Financial Instruments, to assure that assets with related economic characteristics but...

Accounting rule makers have formed an international all-star team to help chart a path out of the current financial crisis.The Financial Crisis Advisory Group, formed by the Financial Accounting Standards Board and the International Accounting Standards Board, is tasked with helping the rule-making bodies sort out the standard-setting implications of...

An intensive study by the Securities and Exchange Commission has concluded that classic fears of credit quality and banks’ viability caused banks to fail and the financial markets to grind to a halt last year, rather than mark-to-market accounting rules.The SEC study, mandated by Congress last fall when it passed...

Private companies have won another deferral in complying with a 2006 order from the Financial Accounting Standards Board to disclose more about tax uncertainties.FASB agreed—although reluctantly and not even unanimously—to defer the requirements of Financial Interpretation No. 48, Accounting for Uncertainty in Income Taxes for another year for non-public entities....

In perhaps a modest sign of the regulatory times, there will be no more first-class travel for short flights at the Public Company Accounting Oversight Board in 2009. To put a good spin on its 2009 budget, which the Securities and Exchange Commission recently approved, the PCAOB tightened down its...

Pension plan sponsors have a new set of ground rules to follow in disclosing how they’re allocating assets and managing risk.The Financial Accounting Standards Board finalized staff guidance that amends Financial Accounting Statement No. 132R: Employers’ Disclosures about Pensions and Other Post-retirement Benefits to flesh out new disclosures regarding where...

Despite objections by users of financial statements, a split Financial Accounting Standards Board plans to proceed as urged by the Securities and Exchange Commission with a quick fix to the impairment model to help address a standoff in year-end financial reporting.FASB instructed its staff in its regulary weekly meeting to...

The Center for Audit Quality issued a year-end white paper to fortify rules calling for a full accounting of troubled mortgages that have been restructured.The paper’s intent is to address questions regarding how to apply FAS 114, Accounting by Creditors for Impairment of a Loan, to restructured mortgages, especially given...

Management assertions about whether a company can continue as a going concern in the current economic environment should be “required reading” for investors, according to a Fitch outlook for 2009.Companies and their auditors are facing off over whether toxic assets without ready buyers should be written down. Exacerbated by a...

In the second of four short-term measures intended to help unclog credit markets, the Financial Accounting Standards Board has published its proposal to revise accounting rules related to embedded credit derivatives.The guidance would amend the requirements of Financial Accounting Standard No. 133: Accounting for Derivative Instruments and Hedging Activities to...